South Shore business owners rally for online sales tax equity

Posted
Thursday, July 19, 2018 10:23 am

Business owners across Long Island gathered at the P.C. Richard & Son in Plainview on Amazon Prime Day to push for legislation mandating online state sales taxes in New York and to urge online retailers to begin collecting sales taxes.

Andrew Garcia/Herald Life

Because of a recent Supreme Court ruling, states will now be able to charge sales taxes on purchases from online retailers like Amazon, even if the companies don’t have a physical presence in those states.

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South Dakota v. Wayfair

In the Supreme Court case, which ended in a 5-4 ruling on June 21, South Dakota argued that billions of dollars were lost annually from the lack of an online sales tax by some out-of-state retailers.

The state sued retail websites Wayfair, Overstock and Newegg. The ruling overturned a 1992 decision that kept states from collecting taxes from mail or online sales unless the retailer had a physical presence in the state.

This effectively reaffirmed the constitutionality of state laws that would mandate the collection of a sales tax for online purchases.

By Andrew Garcia

Following a recent U.S. Supreme Court decision, Bellmore and Merrick business owners are calling for state legislation that they say would level the playing field be-tween in-state and out-of-state online retailers.

The high court’s June 21 South Dakota v. Wayfair decisio will allow states to mandate a sales tax for items purchased on-line from out-of-state retailers — and local retailers want New York to ensure that a sales tax is charged regardless of the sites that online shoppers buy from. First, though, state lawmakers must pass a measure requiring online sales taxes.

Ginny McClean, owner of Have You Heard, a wedding and party invitation store in Bellmore, said she has fought for a universal online sales tax for 18 years.

“If I make a sale of $400, that would be $34.50 in sales tax,” McClean said. “That’s a good chunk of change.”

She explained that if all online purchases in New York carried a sales tax, retailers like her would be better positioned to compete with out-of-state retailers like Etsy and Zazzle, which can undercut local competitors’ prices.

On Monday — which was Amazon Prime Day — dozens of Long Island business owners gathered in Plainview to rally for a state law mandating online sales taxes. They also pushed for websites like Amazon, Overstock and Wayfair to implement the tax before legislation forcing them to do so is passed.

While local business owners said they are confident that such legislation will be approved, because of strong support from a number of state and local legislators, they are hoping for a special session to address the issue before state lawmakers reconvene in January.

Michael Harrison, president and CEO of Axcelsior Strategic Solutions and a Chamber of Commerce consultant, said that the current state of affairs “creates an un-level playing field.” “We need legislation to be able to begin, and the South Dakota law should be a model,” he said.

The law passed in South Dakota after the high court ruling has stipulations: Out-of-state online retailers charge the tax only if they clear $100,000 in sales in South Dakota, or have 200 separate transactions with South Dakota customers. New York’s law should be as simple to follow, Harrison said.

“As a brick-and-mortar store, it [would] level the playing field,” said Gary Sirota, owner of Brands Cycle and Fitness in Wantagh.

Julie Marchesella, owner of Merrick’s Queen of Hearts and past president of both the Nassau Council of Chambers of Commerce and the Merrick Chamber of Commerce, agreed. Nassau County could see revenues of $50 million to $100 million, she said, if the state were to pass similar legislation.

Nassau County Executive Laura Curran said the ruling “gives a tremendous boost of confidence to local businesses that struggle to compete with internet commerce.”

Nassau County Legislator Arnold Drucker, who attended Monday’s rally, explained that a mandated online sales tax could help Nassau and Suffolk counties to fill their budget deficits.

“It would be a win-win all around. It would be a win-win for the state, for Long Island and for the community,” Drucker said. “America was built on brick-and-mortar stores. They are the middle class, and we’ve gotten away from supporting them. This could be a wake-up call to support local businesses.”

Eric Alexander, director of Vision Long Island, said, “It’s time for customers to put their resources where their heart is and invest in these businesses.”

James Gazzale, a representative for the state Department of Taxation and Finance, said last week that state officials are reviewing the Supreme Court decision.